Understanding contribution caps is one of the most important ongoing compliance responsibilities for SMSF trustees. Exceed the limits and you'll face excess contributions tax that can significantly erode your retirement savings — in some cases at your full marginal tax rate. Here's what applies in 2025–26 and how to make the most of the caps available to you.

Concessional Contributions Cap: $30,000

Concessional contributions are before-tax contributions to your super fund. They include:

  • Employer Superannuation Guarantee (SGC) contributions — the rate is 11.5% in 2025–26
  • Salary sacrifice contributions
  • Personal contributions you claim as a tax deduction

All concessional contributions are taxed at 15% inside the fund (or 30% for high earners with income above $250,000 — the Division 293 tax). The concessional cap for 2025–26 is $30,000.

If you exceed $30,000 in concessional contributions, the excess is included in your assessable income and taxed at your marginal rate, less a 15% offset (to account for the contributions tax already paid inside the fund). The ATO will notify you if you've exceeded the cap, and you'll have the option to release up to 85% of the excess from the fund to help pay the tax.

Non-Concessional Contributions Cap: $120,000

Non-concessional contributions are after-tax contributions — money you've already paid income tax on, contributed personally without claiming a tax deduction. These contributions generally enter the fund tax-free and form part of the fund's "tax-free component," which can be paid out tax-free in retirement.

The non-concessional cap for 2025–26 is $120,000. However, the three-year bring-forward rule allows eligible trustees to contribute up to $360,000 in a single year (or two-year spread), effectively "bringing forward" future years' caps.

Critically, you cannot make non-concessional contributions if your total superannuation balance (TSB) is $1.9 million or more on 30 June of the previous year. Make sure you check this before making large after-tax contributions.

Carry-Forward Concessional Contributions

If your total superannuation balance is under $500,000 on 30 June of the previous financial year, you can carry forward any unused concessional cap from the previous five financial years. This is one of the most powerful — and underused — strategies available to SMSF trustees.

It's particularly valuable for people who had a career break, took time off to care for children, were self-employed with variable income, or have recently sold a business asset and want to make a large tax-deductible contribution. superco tracks your unused carry-forward balance as part of our ongoing administration, so you always know what's available to you.

The Total Superannuation Balance (TSB) and Why It Matters

Your total superannuation balance — the total of all your super interests across all funds — determines which contribution strategies are available to you. Key thresholds for 2025–26:

  • Under $500,000: eligible to use carry-forward unused concessional caps
  • $1.68M–$1.79M: access to a two-year bring-forward (up to $240,000 non-concessional)
  • $1.79M–$1.9M: access to a one-year cap only ($120,000 non-concessional)
  • $1.9M or above: no non-concessional contributions permitted

superco tracks your TSB as part of ongoing administration and flags any thresholds that are approaching.

Contribution Strategies to Consider Before 30 June

  • Salary sacrifice to use your full $30,000 concessional cap (especially if employer SGC is below this)
  • Spouse contributions — if your spouse earns under $40,000, you may be eligible for the spouse contribution tax offset (up to $540)
  • Personal deductible contributions if you're self-employed or have income outside of PAYG employment
  • Consider the bring-forward rule if you're planning a large after-tax contribution (e.g. from a property sale)
  • Review any insurance premiums held inside the fund — these are paid from the fund's concessional contributions in some structures and may affect your available cap
"Contribution limits change most years with indexation. We track all of this automatically and alert our clients before year-end so they can make the most of their caps." — Joy Kulavong

What Happens If You Exceed the Cap?

Excess concessional contributions: included in your assessable income and taxed at your marginal tax rate, less a 15% offset. The ATO will send you a determination and you can elect to release funds from the SMSF to pay the liability.

Excess non-concessional contributions: taxed at 47% (the top marginal rate plus Medicare levy), or you can elect to release the excess (plus associated earnings) from the fund. Always check with a specialist before contributing large lump sums to avoid this outcome.

Want to review your contribution strategy before 30 June?

Talk to Joy

Getting contribution limits right is one of the highest-leverage things an SMSF trustee can do. The difference between maximising your caps each year and leaving money on the table compounds significantly over time. If you're unsure whether you're using your caps efficiently — or approaching a limit — book a free chat with Joy before the end of the financial year. There's no obligation, and it could save you a significant tax bill.